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30 September 2021

Financial Fraud Continues to Increase

UK Finance, the country’s banking trade body, has revealed that an average of £4m was stolen by fraudsters every day in the UK in the first half of 2021.

Losses have increased significantly during the pandemic as fraud activity has grown, with the total of £754m stolen in the first six months of the year equating to a 30% increase compared with the same period last year.
Fraud where individuals were tricked into handing over money and personal details rose by 71% against the first half of 2020, with less than half the money in these cases being refunded by banks.

More than half of the total stolen in the first six months of 2021 was through authorised push payment (APP) fraud. In APP fraud, victims believe they are paying a genuine organisation. Funds stolen via this method increased by 71% between January and June 2021 to £355m.

Fake delivery texts asking for payment to release a parcel are a prime example of APP fraud, particularly effective during the pandemic as consumer behaviour switched to online shopping and deliveries.

In order to tackle what he has described as a fraud “epidemic” the Economic Crime Director of building society Nationwide has said that the clearance of payments considered to be risky should be slowed down.

Stuart Skinner said that there should be more friction in the current payments system to prevent money from getting into fraudsters’ hands. However, this would require a significant overhaul of the UK’s payments system which in its current form is designed for customer convenience.

Nationwide, said it has seen fraud rise broadly in line with the average across the sector.

In order to combat fraud, Skinner suggests that instead of allowing all payments to be processed and land in the payee’s account within minutes, more risky transfers should be checked at a slower speed.

The banking sector and the police’s fight against fraud is set to be reviewed by MPs with ministers promising an overhaul in the way it is tackled. To read Redmayne Bentley’s fraud information pages and guidance, visit: www.redmayne.co.uk/help/fraud
Financial Fraud Continues to Increase

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